Absolute (Money) Price

Perfect Price Discrimination A price
structure in which the seller charges the
highest price that each consumer is willing to
pay for the product rather than go without it.
Perfectly Elastic Demand The demand
when a small percentage change in price
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GLossAry 865
causes an extremely large percentage change
in the quantity demanded (from buying all
to buying nothing).
Perfectly Inelastic Demand The
demand when the quantity demanded does
not change as price changes.
Personal Income The amount of income
that individuals actually receive. It is equal
to national income minus undistributed
corporate profits, social insurance taxes, and
corporate profits taxes, plus transfer payments.
Phillips Curve A curve that originally
showed the relationship between wage
inflation and unemployment and that now
more often shows the relationship between
price inflation and unemployment.
Policy Ineffectiveness Proposition
(PIP) If (1) a policy change is correctly
anticipated, (2) individuals form their
expectations rationally, and (3) wages and
prices are flexible, then neither fiscal policy
nor monetary policy is effective at meeting
macroeconomic goals.